E-goods made in India pull ahead of imports

The Centre’s efforts to promote local manufacturing through the ‘Make in India’ programme seem to be reaping dividends with the domestic production of electronics — one of the key reasons behind foreign currency spends after oil — moving ahead of imports for the first time in 2016-17.

Domestic electronics production in 2016-17 stood at $49.5 billion, higher than the near $43 billion spent on imports.

The government has taken a number of steps to boost manufacturing of electronics, particularly of smartphones, appliances, set-top boxes and televisions. A majority of imports in many of these areas are coming from neighbouring China, something India is now trying to counter through fiscal incentives and other measures.

The local benefits were reinforced recently when the customs duty on import of a variety of products was raised earlier this month. This was for products such as mobile phones, set-top boxes, microwave ovens, and LED lamps.

The growth in local manufacturing has been strong over the past three financial years as imports are moderating. In 2015-16, the local production was $37.4 billion against imports of $41 billion, while in 2014-15, electronics goods worth around $30 billion were made in India against $37.5 billion sourced from overseas. The government plans to give a massive push to digital activities and achieve a turnover of $1 trillion by 2022. Manufacturing of electronics is seen as a major contributor towards meeting this target.

The overall demand for electronics (sourced locally and through imports) in 2016-17 has been to the tune of $86.4 billion ($60.5 billion in 2014-15), and the government expects this to more than double by 2020 and stay between $171 billion and $228 billion. “The overall projection by 2023-24 is $400 billion,” an official source said.

What is heartening for the government in this growth is the impetus it has provided to local production and jobs. While 6 crore handsets were manufactured in the country in 2014-15, this has grown nearly threefold in just two years to 17.5 crore in 2016-17. The value of phones made in India has moved up from Rs.19,000 crore in 2014-15 to as much as Rs.90,000 crore in 2016-17.

A similar spurt has been seen in the production of televisions. “The production of LCD/LED TVs grew from nearly 90 lakh units in 2014-15 to 1.5 crore units in 2016-17. In terms of turnover, LED production grew from Rs.2,172 crore in 2014-15 to over Rs.7,100 crore in 2016-17,” the source said.

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